A groundbreaking guide to the commercialization of scientific breakthroughs in chemistry, from successful entrepreneurs
Chemistry Entrepreneurship is a step-by-step guide that is specifically devoted to understanding what it takes to start and grow a new company in the chemistry sector. Comprehensive in scope, the book covers the various aspects of the creation of a new chemical enterprise including: the protection of the invention, the business plan, the transfer from the research center or university, the financing, the legal setup, the launching of the company and its growth and exit strategies.
This hands-on book contains the information needed to help to determine if you have what it takes to be a chemistry entrepreneur, explains how to take an ideas out of the lab and into the real world, reveals how to develop your burgeoning business, and shows how to sustain and grow your business. This much-needed resource also includes interviews with founding scientists who created their own successful chemical companies. This important book:
- Provides the practical information on how to start a company based on a scientific breakthrough
- Offers information on the mindset it takes to become, and remain, successful in the marketplace
- Presents case studies from world-renowned and highly experienced professionals who have successfully started a company
Written for chemists in industry, chemists, materials scientists, chemical engineers, Chemistry Entrepreneurshipis a guide for becoming a founder of a successful chemical company.
Table of Contents
Foreword xv
Preface xvii
1 We Need An Entrepreneurial Culture in Chemistry: Do You Have What It Takes to be a Chemistry Entrepreneur? 1
Frank L. Jaksch
1.1 Introduction: Disruptive Innovation in Chemistry is in High Demand 1
1.2 Examples of Innovation in Chemistry Catching the Eye of the Mainstream Market 2
1.2.1 Food and Nutrition 2
1.2.1.1 Just (formerly Hampton Creek) 2
1.2.1.2 Impossible Foods 2
1.2.1.3 Perfect Day 2
1.2.1.4 Endless West (formerly Ava Winery) 3
1.2.2 Sustainable/Renewable Chemistry 3
1.2.2.1 Ginkgo Bioworks 3
1.2.2.2 Modern Meadow 3
1.2.2.3 Genomatica 3
1.2.2.4 Zymergen 3
1.2.3 Biotech/Pharma 3
1.2.3.1 Moderna Therapeutics 4
1.2.3.2 Unity Biotechnology 4
1.2.3.3 CRISPR Therapeutics, Intellia Therapeutics, and Editas Medicine 4
1.2.4 Diagnostics 4
1.2.4.1 23andme 5
1.2.4.2 Grail Diagnostics 5
1.2.4.3 Viome 5
1.2.5 Cautionary Tales 5
1.2.5.1 Theranos 5
1.2.5.2 Solazyme (TerraVia) 6
1.3 Unique Challenges for Chemistry Entrepreneurs 6
1.3.1 The Most Important Trait of Every Chemical Entrepreneur 7
1.3.2 Chemistry Accelerators, Incubators, and Academic Spin-offs 9
1.3.3 Do Something, do Anything, even if it is Wrong 10
1.3.3.1 Penicillin 10
1.3.3.2 Post-It 11
1.3.3.3 Saccharin 11
1.3.3.4 Teflon 11
1.3.3.5 Viagra 12
1.3.4 You have your Discovery; now you need a Patent 13
1.3.4.1 Provisional Patent 13
1.3.4.2 Patent Application 13
1.3.4.3 Patent Prosecution 13
1.3.4.4 Structure of the Patent Claims 13
1.3.4.5 Patent Search and Prior Art 13
1.3.4.6 Publishing Before Patenting 14
1.3.4.7 PCT International Patent 14
1.3.4.8 Protectable Patent Value 14
1.3.4.9 Selecting the Wrong Lawyer for the Job 14
1.4 Invention is Only the Beginning of Creating a Company 15
1.4.1 Know your Role: Founding CEO vs. Founder vs. Inventor 16
1.4.2 Raising Money: Acquiring the Right Money at the Right Time 17
1.4.2.1 Self-funding 18
1.4.2.2 Friends and Family 18
1.4.2.3 Angel Investors 18
1.4.2.4 Accelerators and Incubators 18
1.4.2.5 Debt 18
1.4.2.6 Strategic Investment 19
1.4.2.7 Private Equity 19
1.4.2.8 Venture Capital 19
1.4.2.9 Investment Banks 20
1.4.3 Can you get the idea for Commercialization? 21
1.4.4 When you are Ready to Commercialize, which path do you take? 22
1.4.4.1 Licensing Deal 22
1.4.4.2 Business-to-Business (B2B) 23
1.4.4.3 Business-to-Consumer (B2C) 23
1.5 Do you have the Traits of an Entrepreneur? 24
1.6 Summary: Do You Have What It Takes? 28
Recommended Readings and References 30
Author Biography 30
2 Taking Ideas Out of the Lab: Why and When to Start a Company in the Biomedical Field 33
Miguel Jimenez, Jason Fuller, Paulina Hill, and Robert Langer
2.1 Introduction 33
2.2 Company Case Studies: Interviews with the Founding Scientists 34
2.2.1 Advanced Inhalation Research: Interview with David Edwards 34
2.2.1.1 Core Technology 34
2.2.1.2 What was the Key Problem and Initial Idea that Sparked the Work? 34
2.2.1.3 Why was it Important to Start Advanced Inhalation Research? 35
2.2.1.4 When was the Technology Ready to Start Advanced Inhalation Research? 35
2.2.1.5 What Lessons Did You Learn Through This Process? 35
2.2.1.6 Current Status 35
2.2.2 Kala Pharmaceuticals: Interview with Justin Hanes 36
2.2.2.1 Core Technology 36
2.2.2.2 What was the Key Problem and Initial Idea that Sparked the Work? 36
2.2.2.3 Why was it Important to Start Kala Pharmaceuticals? 36
2.2.2.4 When was the Technology Ready to Start Kala Pharmaceuticals? 36
2.2.2.5 What Lessons Did You Learn Through This Process? 37
2.2.2.6 Current Status 37
2.2.3 Moderna: Interview with Derrick Rossi 37
2.2.3.1 Core Technology 37
2.2.3.2 What was the Key Problem and Initial Idea that Sparked the Work? 37
2.2.3.3 Why was it Important to Start Moderna? 38
2.2.3.4 When was the Technology Ready to Start Moderna? 38
2.2.3.5 What Lessons Did You Learn Through This Process? 38
2.2.3.6 Current Status 38
2.2.4 Sigilon Therapeutics: Interview with Arturo Vegas 38
2.2.4.1 Core Technology 39
2.2.4.2 What was the Key Problem and Initial Idea that Sparked the Work? 39
2.2.4.3 Why was it Important to Start Sigilon? 39
2.2.4.4 When was the Technology Ready to Start Sigilon? 39
2.2.4.5 What Lessons Did You Learn Through This Process? 40
2.2.4.6 Current Status 40
2.2.5 Suono Bio: Interview with Carl Schoellhammer 40
2.2.5.1 Core Technology 40
2.2.5.2 What was the Key Problem and Initial Idea that Sparked the Work? 40
2.2.5.3 Why was it Important to Start Suono Bio? 40
2.2.5.4 When was the Technology Ready to Start Suono Bio? 41
2.2.5.5 What Lessons Did You Learn Through This Process? 41
2.2.5.6 Current Status 41
2.2.6 Vivtex: Interview with Thomas von Erlach 41
2.2.6.1 Core Technology 41
2.2.6.2 What was the Key Problem and Initial Idea that Sparked the Work? 41
2.2.6.3 Why was it Important to Start Vivtex? 42
2.2.6.4 When was the Technology Ready to Vivtex? 42
2.2.6.5 What Lessons Did You Learn Through This Process? 42
2.2.6.6 Current Status 42
2.3 Why Start a Company? 43
2.3.1 To Have the Largest Impact on Patients 43
2.3.2 To Introduce a New Platform Technology 44
2.3.3 Is Licensing an Alternative? 45
2.3.3.1 Licensing to Existing Companies 46
2.3.3.2 Corporate-sponsored Academic Research 46
2.4 When to Start a Company? 47
2.4.1 Is There Enough In Vivo Validation? 47
2.4.2 Was a Patent Filed? 48
2.4.3 Was a Paper Published? 49
2.5 The Secret Ingredient: Who and What? 51
2.5.1 Who Will Start the Company? 51
2.5.1.1 Seasoned Mentors as Co-founders 52
2.5.1.2 Finding a Great CEO 52
2.5.2 What Will the Company Actually Sell? 53
2.6 Summary: Lessons Learned 54
2.6.1 Lesson 1: Work on a High-impact, Platform Technology 54
2.6.2 Lesson 2: Patent Early and Broadly 54
2.6.3 Lesson 3: Keep the Tech in the Lab as Long as Possible 55
2.6.4 Lesson 4: Must have in vivo Efficacy and Safety 55
2.6.5 Lesson 5: Publish in Top Scientific Journals 55
2.6.6 Lesson 6: Partner with Seasoned Entrepreneurs 55
Further Reading 57
Author Biographies 58
3 In Pursuit of New Product Opportunities: Transferring Technology from Lab to Market 61
Alex Duchak
3.1 Introduction 61
3.1.1 Entrepreneurship and Technology Transfer 61
3.1.2 Pursuing Commercial Product/Service Opportunities via Technology Transfer 63
3.1.3 A Model for Entrepreneurship via Technology Transfer 65
3.1.4 Extracting Technologies from Research Institutions 68
3.2 Technology Discovery and Development 69
3.2.1 Origins of Technology 69
3.2.2 Technology Transfer Communication Models 70
3.2.3 Transitioning Technologies into Products 70
3.2.4 Timing Technology with Industry Acceptance 73
3.3 Customer Discovery and Development 76
3.3.1 Origins of Market Demand and Unmet Needs 76
3.3.2 Identifying a Technology’s Uses 77
3.3.3 The Value Chain for Target Applications 77
3.3.4 Identifying Stakeholders in the Value Chain 78
3.3.5 Designing Product Experiments 82
3.3.6 Customer Discovery and Validation Model 83
3.3.6.1 Customer Routines Analysis 85
3.4 Case Study: The Naval Research Laboratory’s Self-Decontaminating Material 89
3.4.1 The Challenge 90
3.4.2 The Scientist 90
3.4.3 The Problem 90
3.4.4 The Solution 90
3.4.5 The Future of the Technology and Future Applications 91
3.4.6 Technology Background and Advantages 91
3.4.7 Benefits 92
3.4.8 Problem 92
3.4.9 Technical Approach 93
3.4.10 Solution 93
3.4.11 Industrial Safety and Hygiene 96
3.4.12 Healthcare and Pharmaceuticals 97
3.4.13 First Response 98
Suggested Reading and Resources 101
Author Biography 101
4 Financing and Business Development for Hard Tech Startups 103
Bernard Lupien and Andrew Dougherty
4.1 Introduction 103
4.2 Challenges in Financing Hard Tech Startups 104
4.2.1 Balancing Ambition with Reality 104
4.2.2 Hard Tech Sure Is Not Software 104
4.2.3 Hard Tech Investors Are a Skeptical Bunch 105
4.2.4 What Do You Mean I Will Not Exit for $1B? 105
4.2.5 Hard Tech Fundraising Dissonance 106
4.3 Fundraising the Right Way 108
4.3.1 What Kind of Investors Should You Raise from? 108
4.3.1.1 Friends and Family 109
4.3.1.2 Angels 109
4.3.1.3 Early-Stage Institutional Venture Capitalists 110
4.3.1.4 Late-Stage Institutional Venture Capitalists 110
4.3.1.5 Corporate Venture Capital 111
4.3.2 Venture Capital Uncovered 112
4.3.2.1 Fund Life 112
4.3.2.2 Return the Fund 112
4.3.2.3 The Mythical 10× and Why It Is Important to You 113
4.3.3 How to Generate Interest from Investors? 114
4.3.3.1 Team 115
4.3.3.2 Differentiated Technology and Customer Value Proposition 115
4.3.3.3 Large Target Market 115
4.3.3.4 Compelling Plan to Build a Business 116
4.4 The Case for Early-Stage Business Development 119
4.4.1.1 Playbook for Early-Stage Business Development 121
4.4.1.2 Getting Started 121
4.4.1.3 Getting to the Finish Line 122
4.4.1.4 Avoiding Common Pitfalls 123
4.5 Summary 125
Suggested Reading 128
Author Biographies 128
5 Battery Entrepreneurship: Gameboard from Lab to Market 129
Elena V. Timofeeva, John P. Katsoudas, Carlo U. Segre, Alex Duchak, and Thomas Day
5.1 Introduction 129
5.2 Finding a Market Fit for Your Technology 131
5.3 Energy Storage Markets 133
5.3.1 Portable Electronics, Drones, and Medical Devices 134
5.3.2 Grid Energy Storage and Renewable Energy 134
5.3.3 Industrial Batteries and Back-up Power 136
5.3.4 Home Energy Storage 136
5.3.5 Electric Vehicles 137
5.3.5.1 Passenger Cars 137
5.3.5.2 Light Electric Utility Vehicles 137
5.3.5.3 Heavy-duty Utility Vehicles, Trucks, and Buses 138
5.3.6 Other Nascent Energy Storage Markets 138
5.3.7 Airplanes 138
5.3.8 Ships and Boats 139
5.4 Battery Startup Case Studies 139
5.4.1 Boston Power 140
5.4.2 A123 Systems 141
5.4.3 Aquion Energy 143
5.4.4 Tesla 144
5.4.5 Fluidic Energy 145
5.4.6 Envia Systems 146
5.4.7 Alevo 147
5.4.8 SiNode/Nanograf 148
5.4.9 Sakti3 149
5.4.10 Cadenza Innovation 150
5.4.11 24M Technologies 151
5.5 Lessons Learned from the Case Studies 152
5.5.1 Market Challenges 152
5.5.2 Technical Challenges 153
5.5.3 Financial Challenges 154
5.5.4 Team Challenges 154
5.6 Strategies for Startups and Academic Inventors 154
5.6.1 Funding Strategy 155
5.6.2 Strategic Partnerships 158
5.6.3 Intellectual Property (IP) Management Strategy 159
5.6.4 Technology Licensing 162
5.6.5 Press Relations (PR) and Marketing Strategies 162
5.7 Summary 163
Further Reading 165
Author Biographies 165
6 Growing a Business in the Chemical Industry 169
Michael Lefenfeld
6.1 Introduction 169
6.2 Strategic Market Segmentation 172
6.2.1 Do I Have a Solution to an Existing Problem or a Solution Looking for a Problem? 173
6.2.2 A Solution Looking for a Problem 174
6.2.3 A Problem Looking for a Solution 175
6.2.4 The Opportunity Matrix: A Roadmap for Scaling a Chemical Business 177
6.2.5 Find the Right Niche 180
6.2.6 Sometimes a Pivot Strategy Can Work 182
6.2.7 Select the Best Path to Market 183
6.2.8 Licensing vs. Manufacturing 184
6.2.9 Strategic Market Assessment 186
6.3 Building Economies of Scale 189
6.3.1 Gaining Customer Traction 190
6.3.2 Customer Testimonials 191
6.3.3 Pricing Models 191
6.3.4 Market Entry and Initial Sales 192
6.3.5 Focus on Measured Growth 193
6.3.6 Direct Sales vs. Distributors 193
6.3.7 Testing and Pivoting 194
6.4 Growing to Commercial Scale 196
6.4.1 Best Practices 196
6.4.2 Financing 197
6.4.3 Growth Constraints 199
6.4.4 Primary and Secondary Markets 199
6.4.5 Insource vs. Outsource 200
6.4.6 Growing Too Fast 201
6.4.7 Hidden Landmines 203
6.4.8 Overcoming Competitive Threats 203
6.4.9 Case Study 205
6.4.9.1 ActiveEOR for the CHOPS Oil Sector 205
6.4.9.2 New Market Strategy 206
6.4.9.3 Introducing a New Chemical to the Oil Market 206
6.4.9.4 Proof of Concept 207
6.5 Summary 208
Suggested Reading 211
Author Biography 211
7 New Models to Foster Big Pharma and Chemistry Entrepreneurship 213
Antonio Gómez
7.1 Introduction 213
7.2 Setting the Stage 214
7.3 Big Pharma and the Open Innovation Model 216
7.3.1 Universities/Research Institutions 218
7.3.2 Biotech Companies 219
7.3.3 Venture Capital 219
7.3.4 Patient Associations and Charities 220
7.3.5 Public Administrations 221
7.3.6 Contract Research Organizations (CROs) 221
7.4 Considerations for Would-Be Entrepreneurs 222
7.4.1 General Reflections on Collaborations with Big Pharma (the How) 222
7.4.2 Areas of Collaboration Between Chemical Companies and Big Pharma (the What) 225
7.4.2.1 Compound Providers: Custom Synthesis 225
7.4.2.2 Medicinal Chemistry-Based Biotechs 228
7.4.2.3 Cheminformatics-Based Startups 228
7.4.2.4 Getting Information from X-ray Diffraction Studies 229
7.4.2.5 Other Areas 230
7.4.3 Getting in Touch (the Where) 231
7.5 Novel Business Models 232
7.6 Case Study: JJI and the I2D2 Initiative 235
7.7 Summary 237
Author Biography 240
8 The Economic Need for Chemically Based Start-Up Companies 241
Daniel Daly
8.1 Introduction 241
8.2 Promising Programs 244
8.2.1 NSF’s I-Corps (Innovation Corps) Program 244
8.2.2 I-Corps Teams or National Cohorts 246
8.2.3 I-Corps Sites 249
8.2.4 I-Corps Nodes 249
8.2.5 Case Study 249
8.2.6 Non-dilutive Funding Opportunities 250
8.2.7 Angel Funding: Dilutive Funding 252
8.2.8 Accelerators 252
8.3 Other Potential Programs 253
8.3.1 Case Studies 256
8.3.1.1 Evotec 256
8.3.1.2 CatSci 256
8.3.2 Agile Innovation Teams 257
8.3.3 Case Studies 257
8.3.3.1 525 Solutions, Inc. 257
8.3.3.2 ThruPore Technologies 259
8.4 Summary 260
Recommended Reading 262
Author Biography 262
Index 263
